The success to building a market and retaining control over a brand

April 15, 2011

Step 1: build your market For new designers wishing to bring their creations to clients, the first rule is to ensure that there is demand for the product. Building a market by selling directly to end-users is probably the quickest way to gauge product demand. Matalan’s John Hargreaves, New Look’s Tom Singh, and Superdry’s Julian Dunkerton all started their careers on market stalls by selling directly to their customers and so giving these entrepreneurs the initial confidence that there is demand for their respective products before hitting the bigger leagues. Naturally, it is best to start thinking about protecting your precious designs and ideas from a legal perspective sooner rather than later in order to avoid market copy-cats!

Step 2: locate your outlets The natural evolution of bringing a product to market involves approaching stores who are willing to stock your branded products. This will require refining the packaging and price point of your products and it is therefore best to start with small, independently owned, local stores before approaching the larger chain stores as the former will be more inclined to take on new or unique items to differentiate themselves from larger stores. When entering into arrangements with potential distributors of your brand, it is always important to seek legal advice at an early stage to ensure that your commercial arrangements are clearly and accurately documented.

You may also wish to adopt a dual-track strategy of establishing your own branded boutiques in areas where you believe demand will be high combined with selling through established businesses. For instance, SuperGroup (the owner of the Superdry and SurfCo California brands) began with the founding of multi-brand retailer, Cult Clothing, in 1985 by Julian Dunkerton and a former business partner. The original Cult Clothing store in Cheltenham led to the creation of others across the country, many of them in university towns, stocking the Superdry brand (amongst others) which quickly gained popularity with fashion conscious students. Following the successful introduction of the Superdry brand into Cult Clothing stores, a second store format was launched, branded and dedicated to selling only Superdry products. If you decide to establish your own branded boutiques, make sure that your lease arrangements are well negotiated and drafted to take advantage of the impact of the current economic climate on commercial landlords. For instance, a lot of landlords are more inclined now to look at break clauses and shorter term lettings.

Step 3: expand your brandIf your products prove to be successful introductions into independent stores, you may wish to consider approaching national chains and international distributors to grow and expand the recognition and popularity of your brand abroad. Another alternative may be to develop a concession model within department stores as adopted by SuperGroup in House of Fraser department stores.

Remember there are other sales avenues besides the traditional brick-and-mortar retail store. Catalogues, TV shopping networks and online stores can also be effective methods for reaching your customers.

Step 4: retain brand controlThe risk with expansion is that it brings with it the risk of losing control over your brand’s image to distributors who may make business decisions regarding your products based on the bottom line profit figure which may go against your brand’s positioning or image in the market, for example, marking-down prices substantially to "cleanse" their holdings of last season stock. For international expansion, a franchise arrangement can also give you the benefit of knowledge of the local market.

When moving your business to the next level you need to consider all aspects of control of your brand(s). SuperGroup’s successful flotation on the London Stock Exchange in March 2010 catapulted it into the next stage of its global growth and expansion.

In February 2011 SuperGroup acquired its French and Benelux franchise and distribution partner, CNC Collections BVBA. CNC (together with its main subsidiaries), is the leading franchisee globally for the Superdry brand. This tactical acquisition gives SuperGroup greater financial control and the ability to create and control owned larger format stores in key locations across Europe.

Fox Williams LLP advised SuperGroup on its main market listing and on its recent acquisition of CNC Collections BVBA.